A cross-CurrencySwap is an agreement between two parties to Exchange the Basis of servicing of Interest cost in different currencies. With cross-Currency swaps, it is important to recognize that, in addition to exchanging Interest-rate Cash flows or Coupon payments on a Bond, the principal is also swapped at maturity.

An Interest rate Swap is an arrangement in which two parties agree to Exchange periodic Interest payments, at agreed intervals, over an agreed period, but without any principal being paid. The most common and simplest deal involves one party paying a Fixed Rate of Interest and the other paying a floating rate.